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Frequently Asked Questions

What are the advantages of operating a sole proprietorship?

Operating a sole proprietorship comes with several advantages. One of the primary benefits is the ease of setup due to minimal government regulation. This simplicity makes it a popular choice among contractors, consultants, and small business owners. The owner can operate under their own name or create a Doing Business As (DBA) for a more professional appeal. Another advantage is the flexibility in managing business assets. The owner can open a separate personal bank account to hold business assets or use a business bank account under the DBA. This flexibility extends to the cessation of operations as well, where the owner can either sell the business or simply stop doing business. The sole proprietorship also offers significant tax benefits. There are no corporate taxes as all profits and expenses are reported on the owner's personal income tax return. This also eliminates additional tax implications such as workers’ compensation insurance, unemployment insurance, and withholding tax. Moreover, the owner has complete control over the company. Since the sole proprietorship isn’t considered a separate legal entity from its owner, the owner can co-mingle his personal and business assets. This complete control allows the owner to act at his own discretion without any interference.

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